Uniswap governance has taken a significant step forward by approving the UNIfication proposal, which aims to transform the protocol”s economic framework and establish a more deflationary trajectory for the UNI token. The voting concluded with an impressive 99.9% approval, reflecting a strong consensus among token holders.
More than 125 million UNI tokens were cast in favor of the proposal, while only 742 tokens opposed it. This overwhelming support underscores the commitment of the community to adapt and innovate within the decentralized finance (DeFi) landscape.
One of the key aspects of the UNIfication proposal is the activation of the long-awaited protocol fee switch. This new mechanism reallocates a portion of trading fees, which were previously distributed entirely to liquidity providers, to the protocol itself. These funds will be used to burn UNI tokens continuously, thereby reducing the overall supply over time. Additionally, net sequencer fees from Unichain will also be funneled into this burn process, reinforcing the connection between protocol usage and token supply reduction.
Beyond the fee adjustments, the proposal seeks to streamline Uniswap“s operational framework. It consolidates the responsibilities of teams from the Uniswap Foundation into Uniswap Labs and eliminates fees from Labs” interface, wallet, and API services. A recurring growth budget funded by UNI has also been established to promote long-term development and ecosystem growth.
Following the approval, there will be a two-day timelock before the protocol implements a one-time burn of 100 million UNI tokens. This figure is an estimate of the amount that could have been burned had the fee switch been operational since the inception of the token.
The governance package also introduces a Protocol Fee Discount Auctions system, which aims to enhance returns for liquidity providers. This system aligns the interests of Uniswap Labs, the Uniswap Foundation, and the on-chain governance by utilizing Wyoming”s DUNA framework for legal structuring.
Prominent figures within the DeFi community, such as Jesse Waldren, Kain Warwick, and Ian Lapham, have publicly supported the UNIfication proposal, leveraging their substantial voting power to drive the initiative forward.
In light of a shifting regulatory landscape, Uniswap has articulated that this initiative is timely, as decentralized finance is gaining broader acceptance. Founder Hayden Adams stated that the proposal “sets the stage for the next decade of its growth,” positioning Uniswap as a leading platform for token trading.
As of late Thursday, UNI was trading at $5.92, reflecting an 18.9% increase over the past week. Uniswap has generated more than $1.05 billion in fees in the current year, highlighting the scale of activity that will now support its new economic model.
